MLS 2B Group 8

Baldevieso, Balagosa, Langreo, Lusaya, Sotiar, Lao

Is an increase in a country's real level of

national output which can be caused by an
increase in the quality of resources
(by education etc.), increase in the quantity of
resources & improvements in technology or
in another way an increase in the value of
goods and services produced by every sector
of the economy.
It can be measured by an increase in a
country's GDP (gross domestic product).

Is an increase in living standards,

improvement in self-esteem needs and
freedom from oppression as well as a greater
choice.
Referred to as the quantitative and qualitative
changes in an existing economy.
The most accurate method of measuring
development is the Human Development
Index which takes into account the literacy
rates & life expectancy

Economic Development

Economic development implies

changes in income, savings and
investment along with
Implications progressive changes in socioeconomic structure of country
(institutional and technological
changes).
Qualitative.HDI (Human
Development Index), genderMeasurement related index (GDI), Human
poverty index (HPI), infant
mortality, literacy rate etc.

Economic Growth
Economic growth refers
to an increase in the
real output of goods
and services in the
country.

Quantitative. Increases
in real GDP.

Economic Development
Brings qualitative and
Effect quantitative changes in the
economy

Relevance

Economic development is more

relevant to measure progress
and quality of life in developing
nations.

Concerned with structural

Scope changes in the economy

Economic Growth
Brings quantitative
changes in the economy
Economic growth is a
more relevant metric for
progress in developed
countries. But it's widely
used in all countries
because growth is a
necessary condition for
development.
Growth is concerned
with increase in the
economy's output

In 1960, the American Economic Historian,

W.W. Rostow suggested that countries must
pass through 5 stages to become
developed.

1.) Traditional Society

-subsistence
economy
-output not traded or
recorded
-existence of barter
-high levels of
agriculture and labor
intensive agriculture

2.) Pre-conditions:
-Development of
mining industries
-Increase in capital
use in agriculture
-Necessity of external
funding
-Some growth in
savings and
investment

3. ) Take off
-Increasing
industrialization
-Further growth in
savings and
investment
-Some regional
growth
-Number employed in
agriculture declines

4. )Drive to Maturity
-Growth becomes
self-sustaining
-Wealth generation
enables further
investment in value
adding industry and
development
-Industry more
diversified
-Increase in levels of
technology utilized

5.) High mass

consumption
-High output
levels
-Mass
consumption of
consumer durables
-High proportion
of employment in
service sector

Development is determined by
the extent to which the market
is able to allocate resources
The price signal acts to
allocate scarce resources
Governments limit
interference in the working of
the economy
Government role is to
encourage enterprise and to
reduce regulation and
inefficiencies in free markets
and establish ownership of
property rights

Gross Domestic Product (GDP) is an estimated value of the total worth of a

countrys production and services, within its boundary, by its nationals and
foreigners, calculated over the course on one year.

Gross National Product (GNP) is an estimated value of the total worth of

production and services, by citizens of a country, on its land or on foreign
land, calculated over the course on one year.

GNP = GDP + NR NP
Or

GNP= GDP + Net factor income from abroad

GNP= Gross National Products
GDP= Gross Domestic Product
NR= Net income inflow from assets abroad or Net Income Receipts
NP= Net payment outflow to foreign assets

A tool developed by the United Nations to

measure and rank countries' levels of social
and economic development based on:
Longevity, measured by life expectancy at birth
Knowledge, measured by adult literacy and number
of years children are enrolled at school
Standard of living, measured by real GDP per capita

A scale from 0 (lowest human development)

to 1 (highest human development).

An index of 0 0.49 means low development

An index of 0.5 0.69 means medium

An index of 0.7 to 0.79 means high

Above 0.8 means very high development

development

development

adjusts the Human Development Index (HDI)

for inequality in the distribution of each
dimension across the population.
IHDI accounts for inequalities in HDI
dimensions by discounting each
dimensions average value according to its
level of inequality.

The IHDI equals the HDI when there is no

inequality across people but falls below the
HDI as inequality rises. In this sense, the IHDI
is the level of human development when
inequality is accounted for

reflects womens disadvantage in three

dimensions:
reproductive health
empowerment
labor market

The index shows the loss in human

development due to inequality between
female and male achievements in these
dimensions. It ranges from 0, which indicates
that women and men fare equally, to 1, which
indicates that women fare as poorly as
possible in all measured dimensions.

identifies multiple deprivations at the

household level in education, health and
standard of living.
complements monetary measures of poverty
by considering overlapping deprivations
suffered by people at the same time.

index identifies deprivations across the same

three dimensions as the HDI and shows the
number of people who are multidimensionally poor and the number of
deprivations with which poor households
typically contend with.
It can be deconstructed by region, ethnicity
and other groupings as well as by dimension,
making it an apt tool for policymakers.

 Lifestyle

Losses
Generational Transfers
Population
Consumption
Garbage
Pollution

Congestion
Natural resource depletion
Corruption
Economic Growth is unstable
Environmental problems

Low Inflation
Cheap imports
Growing export market
Financial surplus
Depletion of the global resource base and the
impact of global warming.

Huge expansion of waste and

pollution
Over population
Species extinction leading to a
loss of bio-diversity.